Victory Capital Holdings, Inc. Class A Common Stock · NASDAQ:VCTR
Victory Capital Holdings, Inc. Class A Common Stock — Q2 2024 Earnings Presentation
31 slides from Victory Capital Holdings, Inc. Class A Common Stock's earnings presentation, Aug 9, 2024
Slide 1: Second Quarter 2024 Earnings Presentation
Second Quarter 2024 Earnings Presentation August 9, 2024
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements may include, without limitation, any statements preceded by, followed by or including words such as “target,” “believe,” “e
Slide 3: Important Additional Information and Where to Find It
Important Additional Information and Where to Find It This communication is being issued in connection with the proposed acquisition of Amundi Holdings US, Inc. (“Amundi US”) by the Company. In connection with the transaction, the Company intends to file a proxy statement and certain other documents
Slide 4: Agenda
Agenda Quarterly Business Overview Investment Performance Second-Quarter 2024 Financial Results Appendix 4
Slide 5: Quarterly Business Overview
Quarterly Business Overview
Slide 6: Business Overview
Business Overview Strategic Announced signing of Definitive Agreement with Amundi Partnership to become long-term strategic partners on July 9 Ended quarter with total client assets of $173.8bn Q2 2024 Record earnings per diluted share Operating & Long-term gross sales of $5.8bn, net flows o
Slide 7: Long-Term Growth & Capital Allocation Strategy
Long-Term Growth & Capital Allocation Strategy Enhancing Shareholder Value by: Enhancing Balance Sheet Flexibility with: Improving platform with every strategic acquisition Capital allocation policy that supports growth strategy Evolving product set to drive organic growth Strong free cash f
Slide 8: Shareholder Value Creation since IPO
Shareholder Value Creation since IPO July 31, 2024 0.6 $52.39 Cash Dividends $50.00 Total Shareholder Stock Price Return of 357% 0.5 $40.00 $0.41 0.4 $0.37 $30.00 $0.34 0.3 $0.32 $0.32 $0.32 $0.32 $0.25 $0.25 $0.25 $0.25 IPO - Feb. 7, 2018 $20.00 0.2 $13.00 $0.17 $0.15 $10.00 0.1 $0.12 $0.09 $0.07 $
Slide 9: Investment Performance
VictoryCapital Investment Performance
Slide 10: Commitment to Long-Term Investment Performance
Commitment to Long-Term Investment Performance 44 Total Mutual Funds and ETFs with 4- or 5-Star overall ratings 68% Total Mutual Funds and ETFs AUM with 4- or 5-Star overall ratings AUM outperforming benchmarks Strategies outperforming benchmarks 77% 79% 62% 63% 64% 60% 58% 49% 1-year period 3-year
Slide 11: Second-Quarter 2024 Financial Results
Second-Quarter 2024 Financial Results
Slide 12: Second-Quarter 2024 Financial Results
Second-Quarter 2024 Financial Results Revenue of $219.6MM GAAP Operating Income of $110.6MM GAAP Operating margin of 50.4% Second Quarter Financial GAAP Net Income of $1.12 per diluted share Results Adjusted Net Income with tax benefit of $86.6MM ANI plus tax benefit of $1.31 per diluted
Slide 13: Total Client Assets
Total Client Assets Well-diversified Total Client Assets at Period End ($Bn) distribution channels and client base Retail Institutional Direct Retail Institutional Direct 175.5 173.8 166.6 153.5 Significant diversification within each channel Q3 '23 Q4 '23 Q1 '24 Q2 '24 13
Slide 14: Long-Term AUM Flows
Long-Term AUM Flows Multiple Investment Long-Term AUM Asset Flows ($Bn) Franchises generated 3/31/18 positive long-term net flows for the quarter: Victory Income Gross Sales Gross Redemptions Net Flows Investors RS Global Integrity Asset Management New Energy Capital 6.4 7.0 5.8 5.0 ETF
Slide 15: Revenue
Revenue Total Revenue ($MM) Increased revenue consistent with higher 215.9 219.6 209.7 205.8 average AUM $200 Revenue increased 2% from previous quarter and by 8% $150 from Q2 2023 Consistent fee rate $100 within a tight range $50 $0 Operating Metrics Q3 ’23 Q4 ’23 Q1 ‘24 Q2 ‘24 Average Total
Slide 16: Expenses
Expenses Total Expenses ($MM) Q2 ‘24 total operating Compensation Operating Non-Operating expenses decreased Cash compensation, % of revenue 17% vs Q1 ‘24, due primarily to non-cash 143.8 144.0 100.0% expenses 132.3 123.8 90.0% Cash compensation 80.0% 70.0% seasonally declined 60.0% 3% from firs
Slide 17: Non-GAAP Metrics
Non-GAAP Metrics 9/30/17 $MM (except per-share data) Record quarterly diluted ANI Tax Benefit ANI with tax benefit per diluted share earnings per share of $1.31 1.31 $125.0 1.25 $1.30 Record Adjusted 1.18 1.15 EBITDA and Adjusted $1.20 EBITDA Margin $100.0 86.6 82.3 $1.10 79.8 77.0 Highest lev
Slide 18: Capital Management
Capital Management ($mm) 3/31/18 9/30/17 Selected Balance Sheet Items 06/30/2024 Interest Expense and Other Debt ($MM) Financing Costs ($MM) Cash / Cash Equivalents ($MM) 119 16.6 16.5 16.3 Debt ($MM) 992 1,002 1,002 1,002 992 15.6 Stockholders' Equity ($MM) 1,123 Diluted Shares Outstanding (MM) 66.
Slide 19: Appendix
Appendix
Slide 20: Impact of Share Repurchases on Shares Outstanding
Impact of Share Repurchases on Shares Outstanding Diluted Shares outstanding (million) 75 74 74 74 74 74 74 74 74 74 73 73 73 73 72 72 72 72 72 72 70 70 69 68 67 65 66 66 60 55 50 20
Slide 21: Ongoing and Future Cash-Tax Benefits
Ongoing and Future Cash-Tax Benefits Section 338(h)(10) Election • Stepped up cost basis of acquired indefinite lived intangible assets is deductible for corporate income tax purposes over 15 years o $1.7Bn in total future tax amortization o $436MM in future cash tax savings, assuming 25% tax rate o
Slide 22: Notes and Disclosures
Notes and Disclosures Information Regarding Non-GAAP Financial Measures Victory Capital uses non-GAAP financial measures referred to as Adjusted EBITDA and Adjusted Net Income to measure the operating profitability of the Company. These measures eliminate the impact of one-time acquisition, restruct
Slide 23: Notes and Disclosures
Notes and Disclosures Information Regarding Non-GAAP Financial Measures (cont.) Adjusted Net Income Adjustments made to GAAP Net Income to calculate Adjusted Net Income, as applicable, are: • Adding back other business taxes; • Adding back amortization expense on acquisition-related intangible asset
Slide 24: Consolidated Reconciliations of Adjusted EBITDA
Consolidated Reconciliations of Adjusted EBITDA For the three months ended, (in thousands except percentages) 06/30/2023 09/30/2023 12/31/2023 03/31/2024 06/30/2024 GAAP Net income $ 56,671 $ 52,007 $ 55,206 $ 55,691 $ 74,251 GAAP Income tax expense (17,924) (13,915) (18,316) (16,197) 21,524 GAAP in
Slide 25: Consolidated Reconciliations of Adjusted Net Income
Consolidated Reconciliations of Adjusted Net Income For the three months ended, (in thousands, except per-share data) 06/30/2023 09/30/2023 12/31/2023 03/31/2024 06/30/2024 GAAP Net Income $ 56,671 $ 52,007 $ 55,206 $ 55,691 $ 74,251 Other business taxes 382 636 305 369 414 GAAP amortization of acqu
Slide 26: Detailed Reconciliation of Q2 '24 Adjusted Net Income
Detailed Reconciliation of Q2 ‘24 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization Tax Benefit of Other of Acquisition- Acquisition, Goodwill and U.S. GAAP Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 27: Detailed Reconciliation of Q1 '24 Adjusted Net Income
Detailed Reconciliation of Q1 ‘24 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization Tax Benefit of Other of Acquisition- Acquisition, Goodwill and U.S. GAAP Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 28: Detailed Reconciliation of Q4 '23 Adjusted Net Income
Detailed Reconciliation of Q4 ‘23 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization Tax Benefit of Other of Acquisition- Acquisition, Goodwill and U.S. GAAP Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 29: Detailed Reconciliation of Q3 '23 Adjusted Net Income
Detailed Reconciliation of Q3 ‘23 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization Tax Benefit of Other of Acquisition- Acquisition, Goodwill and U.S. GAAP Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 30: Detailed Reconciliation of Q2 '23 Adjusted Net Income
Detailed Reconciliation of Q2 ‘23 Adjusted Net Income (in thousands, except per-share amounts) Adjustments GAAP Amortization Tax Benefit of Other of Acquisition- Acquisition, Goodwill and U.S. GAAP Business Related Stock-Based Restructuring and Debt Issuance Total Non-GAAP Acquired Basis Taxes Intan
Slide 31: Notes and Disclosures
Notes and Disclosures Investing involves risk, including the potential loss of principal. There are no assurances that any fund or strategy will achieve its stated objective. All data in this presentation, unless otherwise noted, is as of June 30, 2024. Past performance does not guarantee future res